About this Show

Closing Bell With Maria Bartiromo

News/Business. Maria Bartiromo. Analysis of the day's winners and losers in the stock market. New.

NETWORK

DURATION
01:00:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Virtual Ch. 58 (CNBC)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
528

PIXEL HEIGHT
480

TOPIC FREQUENCY

Ellison 9, Us 9, Larry Ellison 9, Lakers 9, Matt Damon 8, Aeg 6, China 6, U.s. 5, America 4, Pentagon 3, Oracle 3, Leon Panetta 3, Tim Sloan 3, Panetta 3, Roger 3, S&p 3, Ameritrade 2, Apple 2, Los Angeles Lakers 2, Brazil 2,
Borrow a DVD
of this show
  CNBC    Closing Bell With Maria Bartiromo    News/Business. Maria Bartiromo. Analysis of the  
   day's winners and losers in the stock market. New.  

    October 12, 2012
    4:00 - 4:59pm EDT  

4:00pm
stocks. buy your apple. buy your qualcomm. >> we're only 4% down from the high. it's not even really a correction. really, people shouldn't panic about it. >> thank you, guys. have a good weekend. that is the first hour. it looks like we may be positive going into the close here. welcome to the "closing bell." i'm michelle caruso-cabrera in for maria bartiromo. >> i'm bill griffeth. here's what we're following at the close. it's going to be a photo finish on wall street. the dow, the nasdaq in jeopardy posting the first monday through friday decline since mid-may. the dow is up a point right now. the nasdaq looks like it will be negative. look at this. here's the dow up 1.76 points. it's still losinge ining altitu. the nasdaq down 5.3 points. the s&p down 4.25 points. that's a six-day losing streak now for the nasdaq and the s&p.
4:01pm
so another week in the books, but it's next week that we're going to be following very closely with a deluge of earnings coming our way in the next five days. what will that mean for your portfolio going forward? hello, gentlemen. nice to see you here. steven, what does it mean next week? we get piles of earnings. we seem to think that would be what dominates the markets. should we also be worried about chinese gdp? >> i would be more focused on the earnings. they're slowing down. they're not giving the market a big drive. i'm afraid, you know, we have a lot of different reports and readings. the real big drivers are europe and the u.s. elections. in terms of the big moves, we still have a ways to wait. the last big moves were the ecb and the federal reserve. the market ran up on those. that was great news for the
4:02pm
market. there's no big bullish driver force right now. that's why we're getting this tentative move. a great chart you showed earlier where it fades. nobody wants to benegative, but they're cautious. >> they are right now. mark, what was the benchmark you're waiting for next week here? >> we have a couple data points i'm looking at. that's reports from the empire and philly fed service manufacturing to see if they corroborate the ism reading we had a week ago. that was above the 50 mark. the boom/bust line, if you will. if that's good, i think that portends good news on stabilization on the domestic front. we also get two reports on housing. once again, seeing the numbers coming out of jpmorgan and wells fargo today, we're seeing affirming information that the housing recovery is hardening and that's good news. frankly, i'm looking at china. i think the point of maximum pessimism in china has been reached. i want to see a gdp number that's less than 7.6% but
4:03pm
something that gives you evidence we've seen the worst. >> browne, how concerned are you about what has been a pause or a full decline this week? we haven't been able to gain steam any day this week. are we going see more of that next week? >> in the near term, we very well could. look what we talked about here. you got the economy concerns, earning concerns, election concerns, european concerns. our take is a lot of those things already baked into the cake. remember, the market's forward looking. an easy way to quantify this, look at the vix options. we've noticed a huge surge of vix call ads over the last month. what does that mean to someone listening? that's a lot of concern out there. obviously we just said a lot of concern. look at the last two years. we did this study the last two years. we saw vix call ads just like the last month. they all marked major bottoms.
4:04pm
it has been happening for three and a half years now. we still like the market. >> show that vix chart again, if you want to. the fear indicator has been a contrary indicator. when it's up high, that usually signals a market bottom. we're at a year's low right now. >> everybody's complacent. >> doesn't that signal maybe we're closer to a top than a bottom? >> you're right, bill. you bring up a great point. the interesting thing about the vix, it actually existed before the financial crisis. if you look back, there's almost a six-year period in the 1990s where we were beneath 15-ish or so. in this decade, the vix was beneath 20 consistently. you talk about the vix. there's been record call open interest on the vix. tons of people are betting on a higher vix. from that contrarian point of view, we've been seeing this all year now. the masses are usually wrong. we still think volatility is higher.
4:05pm
>> rick, what's going to happen with interest rates next week? what's the biggest mover for them? >> i think china. i think the data retail sales, a couple housing numbers. i think what's going on between royal bank of scottland might be giving us a glimpse into a deterioration of europe. i think, you know, the big bet many people think they're going to see a 2.35 yield in the long bond. that's a good move. >> on the 30-year? >> yes, yes. >> holy smokes. >> as a matter of fact, david rosenberg thinks you're going to see 2%. these aren't necessarily the most extreme cases. even though the long bond auction didn't go well, you have to wonder -- when we all talk about high frequency trade and the vix going nowhere for a year, i don't think they need to use options to hedge. the markets are more in the moment than forward looking. i'm not sure what we see now is
4:06pm
representative. >> it has been a headline driven market for the last several months. gentlemen, thank you, all. appreciate it very much. it's been a disaster of a week for the bulls. so which stocks are now the biggest losers? which stocks manage to buck the trend? mary thompson has the details. >> all three of the major indic indices, utilities finishing in the red for the week. the dow transports appears to have bucked the downward trend for the week. nope, actually finishing modestly lower. for the most part, it outperformed the rest of the week helped by gains of federal express. take a quick look at the ten sector wes follow. all of them finishing in the red. telecom had its worst week in years. tech was pushed lower by apple's recent weakness. edwards life sciences the biggest loser among the s&p 500. down just about 20%. the company warned its third quarter sales would miss
4:07pm
estimates. another company hit by a disappointing forecast, dollar tree. the discount retailer finishing the week down 14.5% after it said its third quarter sales would come in at the low end of its forecast. we had some winners, though. despite a friday pull back, some coal stocks were up on this because of expectations. higher natural gas prices will help boost demand. i'll call it a 15% gain. lastly, sprint was higher for the week as well. almost up 10%. lastly, it's been a very busy couple of weeks for ipos. we want to point out the calendar is empty next week. that's according to david menlow of ipofinancial.com. >> some of those ipos that were scheduled had been pulled. david said that's a good thing. those that get through are quality. hey, stick with us. >> we have a lot more on this jam-packed friday edition of the "closing bell."
4:08pm
coming up, a yard short? why are banks getting the better end of lower interest rates ahead of the very consumers who could reignite the housing industry? plus, war games. just how serious a threat is a massive cyber attack on the united states? the frightening details are straight ahead. and at a cost. amazon reveals its making no profit on its kindle in order to get more customers to use its services. is this a sound business strategy? that answer and more ahead on the "closing bell." customer erin swenson bought from us online today.
4:09pm
so, i'm happy. sales go up... i'm happy. it went out today... i'm happy. what if she's not home? (together) she won't be happy. use ups! she can get a text alert, reroute... even reschedule her package. it's ups my choice. are you happy? i'm happy. i'm happy. i'm happy. i'm happy. i'm happy. happy. happy. happy. happy. (together) happy. i love logistics.
4:10pm
then don't miss sleep train's wbest rest event.st ever? you'll find sleep train's very best mattresses at the guaranteed lowest price. plus, pay no interest for 3 years on beautyrest black, stearns & foster, serta icomfort, even tempur-pedic. and rest even better with sleep train's risk-free 100-day money back guarantee. get your best rest ever from sleep train. superior service, best selection, lowest price, guaranteed. ♪ sleep train ♪ your ticket to a better night's sleep ♪
4:11pm
housing is making a comeback, at least if you believe what some folks like jpmorgan's jamie dimon are saying. same goes for wells fargo. here's what the cfo tim sloan told us about an hour ago. >> we see a comeback in the housing market. really, beginning in the second quarter, we have seen a sustained recovery. >> so this recovery is good for banks, for the economy, for borrowers, right? banks make record profits on the
4:12pm
mortgage rate spreads and the business they do. but those savings areed on to t. are banks taking advantage of the situation by keeping rate where is they are? let's ask our panel. alex sanchez is with us. so is our resident real estate guru. alex, what do you say? i mean, we heard from tim sloan last hour. rates are as low as they are right now and demand is still not maybe what it should be for rate being that low. why do you think that is? >> bill, we're not out of this economic recession yet. i peen, remember, no recession -- housing has led every recession recovery. the refis are helping millions of americans from being underwater in their mortgages. refis are doing a wonderful
4:13pm
thing to help this economy. yes, banks make money on them, but we want regular loans. we want loans, regular loans. refis are just a regeneration of old loans. >> so should rates be lower than they are now to spur that kind of demand? that's really my question. >> well, bill, look, they're record lows. let's not forget the regulatory burden. we have a cfpb over there who can't even figure out what a qualified mortgage is. we have a lot of banks getting out of the mortgage business because of the regulatory burden that's being placed on our banks, especially our community banks. >> here's my complaint i have, guys. i'm chuckling listening to you. my complaint is this. they just sold me a mortgage at 3.5%, which is a good rate for sure. i know the banks are going to turn around and sell that at a much, much higher rate because the fed is buying all these mortgage-backed securities out there. the effective yield isn't 3.5%.
4:14pm
it's way down in the 2% range. can't we get a little bit of that? the banks are making a very nice profit. >> bob, isn't that by design? the fed is trying to help all these banks recapitalize. we see this every single time during a recession. >> oh, i agree with that idea. i want a bigger slice of the pie. >> what about the people that i talk to every day, which are the people occupant theut there buy selling homes? they talk about mortgage credit. forget the rates. it's the fact they cannot get these loans. if you talk about the banks supposedly helping the housing recovery, really, it's the all-cash buyers out there that are fueling this housing recovery, buying all the stuff on the low end and pushing home buyers out. the question is, when does that credit that's, you know, okay we're near record lows. when does that credit start to ease? when do the banks start letting people borrow again? >> let me answer that question. the banks aren't lending, okay.
4:15pm
we have high unemployment. we're in double digit in some of our counties in florida. >> but your fico scores are way up. they're so much higher than they are historically. i'm not even just talking about how they were during the housing boom. >> yeah, but the regulatory burden and scrutiny in our banks are under. go to the fed and tell that to their examiners who come into our banks every day. we have to preserve exam. yes, we want to lend, but you have to be qualified. there were a not of nonbank lender out there before the secessis recession. they're gone today. today, you have to qualify with a bank. w-2, your financials, your salary history. >> right, but i'm not talking about easy money. i'm talking about fair money. i'm talking about people who are first-time home buyers, et cetera. >> what about the litigation banks faced right now on the soured loans? >> they're not in an easy place. but how do you get buyers?
4:16pm
how do you get real organic buyers back into this market? our market right now is one-quarter all cash investors. that's just not right. >> the point here being is that -- are you saying the regulatory burdens and the lawsuits are such that you need to chart, you need to make a lot of money on the mortgages. is that the argument? >> no, of course not. look, whether you want to admit it or not, we're not going to have a recovery in our nation until the banks recover. banks are a reflection of the local economies we serve. yes, we got to charge. yes, we have to make a profit. the interest rates are at the lowest possible historical levels right now. so we are servicing. we're helping our consumers. do we have cost? of course we do. >> i don't understand why this is such a mystery. all of the u.s. and all the european banks are still trying to rebuild their capital. until they do that, the lending
4:17pm
standards aren't going get easier. it's not that -- >> and they're deleveraging at the same time. >> exactly. the regulators go in and say, you can't make this loan, you can't make that loan. this is the way it is until we get through this tough period. >> and the way they're getting through this, as we all know, the fee base. tim sloan was just here, the ceo of wells fargo. they have this diversified portfolio. yes, they're doing well in the mortgage business, but they're doing better on the fee side of the ledger because that's where they can make their money. >> michelle -- >> get an adjustable, bob and absorb the interest rate risk yourself and you can have a 2% loan. >> that's right, michelle. i agree. >> the risk was not worth it. >> you'd rather the bank bear the risk for 30 years at this rate, okay. >> you've got borrowers who are now paying into their mortgages to try to get these lower rates.
4:18pm
i was told this. look, i have a pretty good job, right? i refied. i was told i needed to pay into my mortgage which has 50% equity to get that great low rate. why is that? >> because they're trying to rebuild capital. >> last word to alex on this question. >> at what cost? >> yeah, well, michelle, you're absolutely right. until we get out of this recession, the regulatory burden and the cost to our banks sis extraordinary. i just had lunch with a banker today in florida. >> who paid? >> she has more compliance staff than lenders. you have to remember the cfpb, da dodd-frank. the economy has not recovered yet. >> guys, this is a reflection of how spoiled americans are when it comes to mortgages. we are the only country in the world where the banks bear the interest rate risk for 30 years.
4:19pm
if we don't pay it back, they don't come after any of our other assets. they don't seize anything else. we just mail them the keys. they bear a lot of risk. >> more compliance officers than lenders. >> thank you, all. go call your mortgage lender. thanks, alex. see you later. that was fun. where were we? u.s. defense secretary -- this is a fascinating story. he's sounding a clairion call. >> these kinds of attacks could be a cyber pearl harbor. >> a cyber pearl harbor. leon panetta pledging tough pentagon action in response to these potential cyber attacks targeting critical u.s. control systems. eamon javers life from washington next on what it could cost corporate america. and then later, is amazon's billionaire founder and ceo on to something huge? confirming the online retailer says its kindle e-readers get
4:20pm
sold at cost, but it actually profits from the subsequent online sales connected to them. we're going to debate the merits of this kind of business model in the back half of the show. also ahead, wouldn't it be cool to be larry ellison just for a day? the third richest man in america who just bought an entire hawaiian island hinting to maria just a few weeks ago about what could be his next acquisition target. wait until you hear what he's set his sights on. work. and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade.
4:21pm
4:22pm
4:23pm
defense secretary leon panetta sounding a warning to the growing cyber threat warning. he's calling on corporate america to do its part in fighting the battle. eamon javers has the story. >> hi, michelle. there were blunt words from the defense secretary speaking last night at a business nechevent iw york city. he told the business community he wants to enlist their help in fighting a potential cyber war against u.s. infrastructure assets. the defense secretary laid out a pretty stark set of worst case scenarios of what could happen if there's a cyber war. >> they could, for example, derail passenger trains or even more dangerous, derail trains loaded with lethal chemicals. they could contaminate the water supply in major cities or shut down the power grid across large parts of the country. >> now, as scary as though
4:24pm
scenarios are, what he said was he needs the business community to be involved, and he pushed for legislation and new funding for a core of cyber warriors inside the pentagon here in northern virginia. what he's saying is he wants the business community to be involved here and he wants this legislation, which is going to allow partnership between the pentagon and businesses, but not all businesses are necessarily buying into this idea. we talked to the folks at the u.s. chamber of commerce. here's what they had to say. they're weary of additional regulations. they said, the optimal way forward will not be found in layering additional regulations on the business community. we would like to see a program that will work. guys, a little bit of a push/pull here. the question is, who bears the responsibility for defending a cyber attack, and who pays the costs associated with that defense, which is going to have to be massive if you're protecting the entire country. >> yeah, thank you, eamon. how much danger are we in?
4:25pm
guys, thanks so much for joining us. are we really facing a cyber pearl harbor attack? >> roger? >> so we're under attack right now. i think that's what secretary panetta was trying to make everyone aware of. we've had two specific attacks that are of particular concern. one are the cyber attacks in the middle east. both of those attacks were unique because they not only stole intellectual property, but they physically destroyed the computers they targeted. the second set of attacks is what's been going on in your neck of the woods in wall street. a series of financial institutions have suffered more complex service attacks than in the past. this is probably a nation state. >> which one? >> it was probably iran. >> iran. >> larry, are we prepared for?
4:26pm
you know, when i think terrorist attack, and i think a lot of people are the same way, we think of another play, a hijacking. are we prepared for the kind of attacks that leon panetta was talking about? >> it's good separate this out as roger did. we're talking about a lot of different things. the sorts of attacks that secretary panetta was talking about are ultra sophisticated attacks, probably by nation states. it's probably a lot to ask any individual corporation to go one on one against a major military power and fight back. for that, we need partnership. the good news is that we do have partnerships between industry and government. we are doing a great deal of collaborative work together. what we really need to do is insent vise greater investment. right now all the incentives are on the side of the attackers. >> what other incentive do you need than to protect yourself from a cyber attack? >> you have to protect yourself not just from any cyber attack.
4:27pm
we're doing a great deal on that. private sector investment in protecting themself has doubled over the past five years to $80 billion a year. the department of homeland security is $59 billion in comparison. what we're talking about is defending them against nation state attacks. individual companies are never going to be in a place they can all by themselves defend against a nation state attack. so for that, we need an additional sort of collaboration such as is indicated in the bipartisan bill that was passed through the house of representatives that would have created greater liability protections that would have allowed private industry to share information with the government much more affirmatively and get more information back from the government. that's the sort of collaboration we need. >> roger, we talk a lot about iran. what about china as well? we know there's a lot of china hacking and snooping. is that different than an attack? or should we see them in the same way? >> here's what the chinese are doing. they're doing a brilliant job of
4:28pm
it. the government last year issued a report where it named china as the single biggest culprit in state-sponsored espionage. they're stealing our property. they're trying to skip over research and development, steal our ip, and develop products and capababilities as a result. >> but they're not necessarily trying to poison our water system or shut down our internet or things like that? >> we need to understand something here. regardless of who the adversary is, they're taking advantage of the same set of vulnerabilities. as larry said, we need more legislation that tries to create a greater level of security. here's what the secretary is talking about. he was talking about industrial control systems that are very vulnerable to cyber attack in our nation's water supply and electric power grid. those could be attacked, and we can suffer catastrophic damage. the chinese are just stealing our intellectual property. they have the capability, if they chose to, to put the type of malware into our networks that could have a similar
4:29pm
effect. we need to understand the magnitude of the cyber security threat as secretary panetta highlighted. >> i got to go here, larry. i got to ask, what kind of price tag are we talking about? this sounds very expensive, this cooperation between government and corporations. i mean, who pays for it, and how much are we talking about? >> well, the private sector and government are both going to have to ante up a lot more. we're going to have to provide ways for them to collaborate better. the bad guys collaborate great. we, on our side, are currently impeded by all sorts of laws, regulations that are built for an analog world that we need to break down. the rogers bill goes a long way towards doing that. i think that there's a lot of investment we could unleash in this space. we have to get out some of the regulatory underbrush that currently exists. >> all right. you heard it first here, folks. something we'll probably be talking about in the weeks and months to come. thank you both for joining us. appreciate it. >> you bet. money spinner or money
4:30pm
burner? amazon's billionaire ceo says the online retailer sells its kindle e-readers at cost. we're going to debate whether that's a smart strategy on the other side of the break. and from one billionaire to another. >> let's say if i wanted to buy something like the los angeles lakers, i could go buy the los angeles lakers. they're not for sale. >> but you'd like to buy them? >> oh, sure. i'd love to buy the lakers. >> was the dye already cast there? larry ellison speaking about liking the lakers just a couple weeks ago. turns out he may be bidding on the company that owns them. our wealth editor coming up on ellison's latest shopping target. later, matt damon speaks about the water crisis that's killing millions of people a year. stick around.
4:31pm
humans -- sometimes life trips us up. and sometimes, we trip ourselves up, but that's okay. at liberty mutual insurance we can "untrip" you as you go through your life with personalized policies and discounts when you need them most. just call... and speak with a licensed representative about saving on your policy when you get married, move into a new house... [crash!] or add a car to your policy. don't forget to ask about saving up to 10% when you combine your auto and home insurance with liberty mutual. security, coverage, and savings.
4:32pm
all the things humans need to make our beautifully imperfect world a little less imperfect. call... and lock in your rate for 12 months. liberty mutual insurance. responsibility. what's your policy?
4:33pm
amazon ceo confirming what analysts have long suspected. that the online retailer sells its kindle e-reader at cost. he e explained that we want to make money when people use the devices, not when they buy the devices. the continuing relationship with the customer is where we hope to make the money over time. >> he said recently he sees the kindle not as a gadget but as a service. >> exactly.
4:34pm
you buy stuff on it. you buy books. you buy subscriptions. >> some are wondering whether that's a smart strategy or a money-losing proposition. you think it's a dangerous move. why? >> when amazon first introduced the kindle fire, it was a $199 tablet. they took over the market. everybody wanted one. it was a great gateway into their products and services. now it's a flooded market. you have google, samsung, apple, barnes & noble. before, that model worked. you would sell it at $199 -- >> but they're making it super cheap purposely. >> but i think if you get fewer customers because you have a more saturated market, then it's a real risk because say everybody now -- you're attracted to the ecosystem. apple's got the best. if they have a tablet in that market, we're in trouble.
4:35pm
>> rj, what do you think about that? i happen to believe jeff is the smartest guy in the room. he's up there with steve jobs in the category of being a brilliant businessman. but what about todd's suggestion that the strategy only works if you don't have any competition out there. >> now, i disagree with that point. i think that the content offering amazon has vastly improved since when they first launched the kindle fire. the ability to lock in customers and really the prime customers is who i'm talking about, the customers who are more apt to be subscribers to the business on a regular basis. that's a great way to monetize your business. with that group growing anywhere between 20 and 30% annually, i think that's a smart move. that's going to lock in their customer base and make them less likely to switch out to other businesses. >> let's talk about amazon and best buy. best buy now says they're going to match everything on amazon. is that a threat to amazon? >> walmart is doing it too. >> i think that is about amazon
4:36pm
and walmart, not amazon and best buy. >> i agree. i don't think it's that big of an issue. holiday shoppers like to shop online. if you have a kindle, you can go right though their portal. >> is this one of the great battles of our day in is this burger king/mcdonald's again? are we there? >> no. >> why not? >> i think amazon has a much better offering. you can get everything you want from there. >> you say amazon won. >> yeah, sure. >> but you're in the betting on the kindle. >> i don't think they're going to win the tablet wars. if apple comes in with a $300 tablet, they're in a lot of trouble. >> walmart still brings in -- they just sold another $100 million. it's bigger. >> it's bigger, but i'm saying when we're talking about a tablet war, amazon's in trouble because there are a lot more entries than there were when it launched the original kindle fire. >> we're talking about retailers going after the whole amazon
4:37pm
business model, same-day delivery, cheaper distribution like walmart's offering right now. best buy going of them. what about all of that? >> i couldn't agree more on the point that the retailers are in trouble here. frankly, while best buy may match them on price in a couple different categories, it's not across the entire store. they have a long way to go. honestly, with not having the physical burden of physical store, amazon is going to maintain that cost leadership. even if best buy and walmart starts cutting costs, amazon makes it more viable. it's more convenient to get tt that day or two days later. that's a compelling customer proposition. >> long term, is walmart threatened by amazon? is this another great battle of two -- >> i think it is. i really think we're shaping up to have a great battle between these two firms. i think amazon in the long term wins. it's got a great business model.
4:38pm
you throw content, convenience, and just the wide selection. you've got a winning model. >> can you imagine when amazon went public that years later we would be saying it might be a threat to walmart? they just sold books. >> right. >> it's amazing. >> you though who i think thought that though? jeff. he called it amazon. >> very good point. i thought it was a region. he was referring to size. >> gentlemen, thank you. >> thank you. >> was billionaire larry ellison being coy when maria asked him about his interest in buying the los angeles lake aers couple weeks ago? >> it's very expensive way to get floor seats. there's a cheaper way to get floor seats. the lakers are my favorite team. >> his favorite team. >> we agree on something. how about that? >> turns out the self-made billionaire is actually very interested, maybe, in the company that actually owns the lakers. our wealth editor robert frank as the latest on ellison's hoop
4:39pm
dreams next. also, competition will be stiff. the americas head to brazil for serious competition. do we get to taste wine here? >> that would be an awesome job. >> love that. later, game on or game over? can the video game industry plug into profits before the holiday season? we're going to talk winners and losers for video game stock. ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this.
4:40pm
we create easy-to-use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! we knew you needed a platform that could really help you elevate your trading. so we built it. chances of making this? it's a lot easier to find out if a trade is potentially profitable. just use our trade & probability calculator and there it is. for all the reasons you trade options - from income to risk management to diversification - you'll have the tools to get it done. strategies. chains. positions. we put 'em all on one screen! could we make placing a trade any easier? mmmm...could we? around here, options are everything. yes mom, i'll place a long call to you tomorrow. i promise. open an account today and get a free 13-month eibd™ subscription when you call 1-888-280-0154 now. optionsxpress by charles schwab.
4:41pm
4:42pm
he's one of the world's richest men. larry ellison loves to go shopping for big things. he even bought a hawaiian island recently. but is he spreading himself too thin? maria bartiromo asked him that question when he she sat down with him earlier this month. >> you pledged $4.2 billion of your stock to take out a loan. why did you do it that? >> actually, i don't owe $4.2 billion or even $1 billion. it turns out that i do have a line of credit where let's say if i wanted to buy something like the los angeles lakers, i could go buy the los angeles lakers. they're not for sale, but -- >> but you'd like to buy them? >> oh, sure. i'd love to buy the lakers. of course. it's a very expensive way to get floor seats. >> so was that more than just
4:43pm
idle talk? robert frank tells us why ellison may have just tipped his hand. >> thanks, michelle. after larry ellison made that lakers comment, i did a little poking around and found that, in fact, a piece of the lakers was for sale. the piece was owned by aeg. that's the sports group. aeg is currently up for sale for more than $10 billion. that's including the lakers piece. i posted a story two weeks ago after that interview saying that ell ellison's $4 billion in, quote, shopping money, as he called it, could, in fact, be used for an aeg bid. media reports confirmed that and said he is considering a possible bid for aeg, but the interest is preliminary. bankers say ellison probably wouldn't want all of the companies. $10 billion is a lot, even for ellison. he probably could just want the lakers piece. the l.a. kings, that's the hockey party of aeg, and maybe other pieces like the ten notice
4:44pm
tour finals in london. that's also part of aeg. larry ellison also a big tennis as well as basketball fan. these sports trophies would add to ellison's personal empire, which by my account is the largest in the world. he owns dozens of mansions and properties from malibu to newsport to tokyo. he owns a 280-foot yacht. he's very involved in the america's cup. he also has his own jet, sports car, and very extensive art collection. aeg would be by far his personal biggest trophy yet. back to you guys. >> talk about an expensive way to get floor-side seats. that would be it right there. that's for sure. robert, stay there. let's talk about this as we bring if our next guest to talk about what else is on larry ellison's shopping list. >> joining us is mark of premier wealth management. he's known for his taste for all these fine things in life. now this eye on sports. do you think there's growing interest in this type of
4:45pm
business among the wealthy? >> absolutely, i do. larry ellison has always fancied himself as a trend setter. he knows growth. he knows how to develop growth assets. he sees the sports and entertainment business -- >> mark, mark, mark. you seem to think this is a financial attraction. all rich boys want to own teams. that's it. it doesn't matter if they lose money. >> but it's just not a passion investment. it's definitely business investment as well as passion. >> come on. sports teams are a horrible investment. who makes money? >> it's right up there with modeling companies. maybe a movie company too. >> well, i believe that's part of it. you get connections, obviously. there is money to be made in the future. content is king. entertainment and sports is on an upswing. i know larry knows exactly what he's doing, especially when saying his accountants are
4:46pm
involved. >> michelle, you look at the value of sports teams today, whether it's manchester united or the dallas cowboys. look at what these guys paid for these teams in the 1980s and 1990s. they're now worth billions of dollars. some of the teams have paid off. but you're absolutely right. a lot of it is ego and fantasy. >> they love that shot, court side, the close-up of them. if they're single, the girl who's sitting next to them. come on. >> it's that too. >> ultimately, he has to make money though. >> i don't know about that. >> he has $35 billion other he can deal with. >> larry ellison wins no matter what he does. >> people always said to me in silicon valley, you buy oracle when larry is at oracle. you sell oracle when he's on his yacht somewhere. are we at a point right now where he's more focused on the hawaiian island, the yachts? he's bought a great deal of real estate in malibu.
4:47pm
now we're thinking about him buying up some sports teams as well. what's the motivation here? >> that's a really good question. larry ellison to me is very fascinating psychologically. why does he need all these they thinks? he built, at one time, the largest yacht in the world. he since downsized. i think part of it is he's a very competitive guy both in the business arena and personally. when paul allen built octopus, larry ellison wanted his boat to be even bigger. i think part of it is keeping up with these guys. also, he wants to leave a legacy beyond just being a corporate executive. we don't remember great corporate executives from the 1920s. we do remember the museums they leave, the sports teams they created, the art that they left. larry said a lot of these homes he's bought are going to be museums. i think part of it is his legacy. >> would you like to sit in my box this weekend? would you like court-side seats? >> not that michelle has ever
4:48pm
heard lines like that before. >> thanks, guys. >> thank you. >> i know what you're thinking. don't you dare say it on the air. go ahead. >> if you've ever ordered fine wine at a fancy restaurant, you know how invaluable a good sommelier can be. the best of the best are preparing to go palate to palate in brazil just about a week from now. they're vying for the coveted title of best sommelier of the americas. >> the association of sommeliers international holds the contest once every three years. the competition is expected to be fierce. wine, huge business with annual sales of $230 billion worldwide according to the global almanac. the next time you do some fine dining and order wine, remember to give your sommelier a bit of love. i told the story of the young son of friends of ours. we were going a very fine restaurant. they came over, was offering up the wine, tasted it indiand the whole thing.
4:49pm
our young friend said, why do they only hire somalians to do that job? that's what he wanted to know. so we've always in our family called them somalians for that reason. >> that's awesome. will the video game industry see a green christmas this year? we'll size up the winners and losers next ahead of key holiday shopping season. we're also going to talk about how to trade their shares. so stick around. and she may not be in the building, but maria's hard at work speaking with matt damon. she gets to meet matt damon. >> you're really upset about this. >> uh-huh. about his mission, not impossible, to tackle the global water crisis that's killing millions worldwide. wait until you hear what matt damon is doing about that.
4:50pm
4:51pm
4:52pm
see these game sales numbers out? is there any hope for the struggling video game industry after another sales plunge or is it game over for this business? julia boorstin is in los angeles. >> september marked the tenth
4:53pm
consecutive month of year over year declines for video games and total retail sales dropped 24% last month. the biggest problem is with hardware makers. consol sales were down 39%. gamers are waiting for nintendo's wii-u next month. games dropped 18% despite big hits. madden sold 11% more than last year's title. p.c. games fared a bit better. world of war craft helped soften the total game declines. the big story here is the new york rise of digital games is happening. digital totalled nearly $500 million last month about 9% as much as packaged goods. zinga shares didn't benefit
4:54pm
much because less than a third have paid to upgrade. as we head to the holiday season we will see game launches. there was one indicator of positive momentum, hardware sales in september were up from august. michelle and bill. >> thank you so much. bearish news about the video game sector do traders see upsides or do they think game retailers are the better bet. let's get the answer from brian. where is there upside game makers or retailers? >> it looks to be the retailers. you look at act vision and the releases coming out, the game retailers, a name like game stop seeing tremendous amount of bullish activity to the upside. you feel a sense that game stop
4:55pm
is a name that could take off 10% higher or so in the next weekend. >> you are going to be on "options action" later on. be sure to stay tuned for "options action" straight ahead at the top of the hour. >> right after us. you know more than 3 million people die from water related diseases. >> matt damon speaks with maria next about the crisis and what is being done to make a difference. stay with us. [ male announcer ] trading's like a high-speed train. and you don't want to miss it with thinkorswim by td ameritrade. you get knock-your-socks-off tools, simple one-click orders, real-time paper trading to hone your skills, plus anytime you need it support. ♪ stocks, options, futures, and forex. get your trading on track. thinkorswim by td ameritrade. trade commission free for 60 days, plus get up to $600 when you open an account.
4:56pm
4:57pm
4:58pm
nearly 1 billion of the world's poor lack access to clean water. this issue is getting somewhat of a hollywood treatment these days. maria spoke with matt damon the co founder . >> every 20 seconds a kid somewhere on our planet dies because of lack of access to clean water and sanitation. >> matt damon and gary white co founded the nonprofit organization water.org dedicated to ending the water crisis among
4:59pm
the world's poor. >> we are all about trying to piggyback on to exciting infrastructure. how do we work in the slip stream of the forces like the powerer at the base of the pyramid as citizens and customers. >> once people start seeing the positive effects it starts to change their behavior and understanding and perception of these things. suddenly problems that seem like you are going to be pushing the boulder up the mountain you go we can beat this thing. >> you will get more of maria's conversation with matt damon on cnbc and your local stations. we talked about the nobel peace price going to the european union administered by the norwegian parliament. i said norway gave themselves the nobel peace prize. norway is not in the